Commercial Solar Power Installation: An Administrator’s FAQ on On-Grid Systems, 100kW & 200kW Setups

I manage purchasing for a mid-sized company (about 250 employees across two locations) and over the past five years I've helped our team evaluate on-grid solar systems, commercial solar power installations, and everything from a 100kW three-phase setup to a 200kW industrial system. Here are the questions I wish someone had answered before we started.

What Size Solar System Does My Business Need?

It depends on your electricity consumption. For a typical commercial building, a 100kW three-phase solar system covers roughly 80,000–100,000 sq ft of office space with moderate HVAC use. A 200kW industrial solar system suits manufacturing or warehouses running heavy machinery. The rule of thumb: look at your annual kWh usage from utility bills, then divide by 1,200–1,400 (solar production per kW in most U.S. regions). That gives you the kW size you need. (We used this method for our own 150kW system, and it's been within 5% of actual generation.)

What Does 'On Grid' Mean for Commercial Solar?

An on-grid solar system (also called grid-tied) is connected to the utility. You generate power during the day, use what you can, and export excess back to the grid. At night or on cloudy days, you draw from the grid. Most businesses choose this because you don't need batteries — but net metering policies vary. In our state, we get credits at retail rate for exported power. What most people don't realize: some utilities require a separate meter and interconnection agreement, so start that process early (it took us 8 weeks for approval).

How Much Does a Commercial Solar Power Installation Cost?

Installation costs have dropped significantly — as of early 2025, a 100kW system typically runs $150,000–$200,000 before incentives, and a 200kW industrial system might be $280,000–$360,000. These numbers include panels, inverters, racking, labor, and permits. (Not including batteries). The key variable: roof type, age, and whether you need structural reinforcement. I learned that lesson the hard way — our first quote didn't include a $12,000 roof reinforcement because the installer assumed a flat concrete roof. Always ask for a site survey before locking in a price.

Note: Sunnova's solar lease option can avoid upfront costs, but the per-kWh rate should be compared with your current retail electricity price. I'd rather spend 10 minutes explaining lease mechanics than sign a contract that doesn't match your budget horizon.

Should I Lease or Buy the Solar System?

If your company has access to tax credits (the 30% federal ITC plus potential state incentives), buying gives you the best long-term ROI — you own the asset and the electricity is free after payback (usually 5–7 years). Leasing eliminates upfront cost but the installer keeps the incentives; your savings are smaller and predictable. For a business that plans to stay in the building for 10+ years, buying wins. For shorter tenancy or if you want zero capital outlay, consider a lease. We chose to buy with financing because the 7-year payback aligned with our capital budget cycle.

What About Battery Storage? Do I Need It With an On-Grid System?

For most on-grid commercial applications, battery storage isn't required — the grid acts as your battery. However, if your utility has demand charges or you experience frequent outages, an LFP (lithium iron phosphate) battery, like Sunnova's heated LFP system, can shave peak demand and provide backup power. The catch: adding batteries roughly doubles the cost (a 100kWh storage system might add $60,000–$80,000). But for a 200kW industrial facility with process-critical loads, it can be worth the investment. (Our facility skipped batteries after a cost-benefit analysis; the utility here has only two outages in five years, and downtime costs were manageable.)

How Long Does the Commercial Solar Installation Take?

From signed contract to interconnection, figure 3–6 months for a 100kW system and 4–8 months for a 200kW system. The biggest delay is permitting and utility approval (we lost 5 weeks because the utility engineer was backed up). Installation itself is relatively fast — maybe 2–4 weeks for a large roof. In my first year managing projects, I made the classic scheduling mistake: trusting the contractor's 'optimistic' timeline without adding a 20% buffer. Cost me a lot of stress when we had to push building occupancy. Now I plan for worst-case and celebrate when we beat it.

Are There Tax Incentives for Commercial Solar?

Yes. The federal Investment Tax Credit (ITC) is 30% for systems placed in service by 2032, stepping down to 26% in 2033 and 22% in 2034. Many states add their own incentives (accelerated depreciation, grants, or renewable energy certificates). Per the IRS (irs.gov), to qualify, the system must be placed in service and used for business. You'll need to claim it on Form 3468. The key: your company must have enough tax liability to utilize the credit — if not, you can carry forward or consider a financing structure that passes the credit to the installer (like a solar lease).

What Should I Look for in a Commercial Solar Installer?

Not all installers handle 100kW+ systems well. Here's what I check now (after a couple of bad experiences):

• Experience with your building type: flat roof vs. sloped, structural load capacity.
• Licensing and insurance: verify contractor license and workers' comp (our first installer lacked proper insurance — ugh).
• Warranty: panel warranty (25-year performance) and workmanship warranty (at least 10 years).
• References: ask for three similar-sized commercial projects — and call them. The vendor who couldn't provide a proper reference cost us a $3,000 deposit when they went out of business.
• Financing options: can they offer a solar lease, PPA, or loan if you prefer not to buy?

An informed customer asks better questions and makes faster decisions. (Surprise, surprise — the best installers also appreciate those questions.)

Got more questions? Drop them in the comments — I'll answer based on what I've learned from managing five different solar vendor relationships over the past four years.